FRISCO, TX - GameSquare Holdings, Inc. (NASDAQ:GAME), the parent company of FaZe Clan Esports, announced an expansion of its sponsorship agreement with Rollbit, a prominent online gaming and entertainment company. This multi-year, multi-million dollar deal extends the initial sponsorship that began in January 2024.
The partnership, which focuses exclusively on FaZe Clan's Counter-Strike team outside of the United States, comes after the team's notable performance, ranking #1 globally for 34 weeks and maintaining a top 5 position for 86 weeks since January 2022, according to HLTV rankings.
Erik Anderson, President of FaZe Clan, expressed enthusiasm about the expanded relationship with Rollbit, highlighting the exposure and growth opportunities it provides. Sam Norman, Head of Partnerships at Rollbit, also remarked on the value of the partnership in growing Rollbit's brand and its commitment to esports.
Justin Kenna, CEO of GameSquare, emphasized the significance of the partnership, citing the prior growth of their esports team by over 220% in two years. The company now fully owns FaZe Esports, which Kenna referred to as the largest esports brand globally.
GameSquare's mission is to engage with younger demographics through media, entertainment, and technology, leveraging FaZe Clan's influence in the gaming community. The company aims to replicate its successful growth strategy to further expand FaZe Esports.
The information for this article is based on a press release statement. GameSquare is supported by notable investors, including Dallas Cowboys owner Jerry Jones and the Goff family. For more details on GameSquare and its operations, visit their official website.
The press release also contained forward-looking statements regarding the future performance, revenue, growth, and profitability of the Company and FaZe Media Inc., which are subject to various risks and uncertainties that could cause actual results to differ materially from those projected. GameSquare has not provided any update on these forward-looking statements since the release.
In other recent news, GameSquare Holdings Inc (NASDAQ:GAME). has been making significant strides in its financial performance. The company reported a 24% increase in pro forma revenue for the second quarter of 2024, reaching $28.6 million, and a substantial improvement in profitability with a pro forma adjusted EBITDA loss of $5.4 million, a considerable decrease from a $10 million loss in the same period last year.
Roth/MKM has reiterated its Buy rating and $5.00 stock price target for GameSquare, reflecting the company's recent achievements and future prospects. The firm's confidence stems from GameSquare's ability to secure multi-year partnerships and raise substantial capital, which are expected to contribute positively to the company's financial performance in the future.
As part of its strategic progress, GameSquare has outlined priorities which include the integration of FaZe Clan, divestiture of noncore assets, and leveraging proprietary assets for growth. The company also announced new brand partnerships worth $3 million with Topgolf, 5-hour ENERGY, and Dairy MAX.
These recent developments have led GameSquare to anticipate an annual revenue exceeding $100 million with a gross margin between 22.5% and 27.5%. However, it's important to note that the gross margin declined due to a less profitable mix of sales. The company expects the benefits of current investments to materialize in the second half of 2024 and is optimistic about the growth of the events business.
InvestingPro Insights
As GameSquare Holdings, Inc. (NASDAQ:GAME) continues to make waves in the esports industry with strategic partnerships and the impressive performance of its FaZe Clan's Counter-Strike team, investors and industry observers are keeping a keen eye on the company's financial health and market position. According to recent data from InvestingPro, GameSquare's market capitalization stands at $31.53 million, reflecting its current valuation in the market.
Despite the fanfare around its brand growth and partnerships, InvestingPro Tips suggest that GameSquare is grappling with financial challenges. Analysts have raised concerns over the company's cash burn rate and weak gross profit margins, which could impact its ability to sustain long-term growth without additional capital infusion. Additionally, the company's short-term obligations outweigh its liquid assets, indicating potential liquidity risks.
InvestingPro Data reveals a significant revenue growth of 175.59% over the last twelve months as of Q2 2024. However, the company's operating income margin during the same period was -30.61%, underscoring the difficulties in translating top-line growth into bottom-line profitability. With a P/E ratio of -16.95, the company's earnings picture remains challenging, and analysts do not anticipate GameSquare will be profitable this year.
For investors considering the esports sector, these insights are crucial for understanding the risks and opportunities associated with GameSquare. For more in-depth analysis and additional InvestingPro Tips on GameSquare, including valuation multiples and price trends, visit InvestingPro. The platform offers a total of 14 tips to help investors make informed decisions.
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